Many thanks. Good morning and welcome to the IPH results presentation for the year ended 30 June 2021. My name is Andrew Platt, and I'm the CEO of IPH. Joining the call this morning is John Wadley, our CFO. Thank you all for joining us for today's presentation on our FY 2021 result and for your continuing interest in IPH.
Before commencing the formal presentation, I would like to acknowledge and thank the IPH executive team and Board for their support throughout the year and of course all of our people across the group for their terrific contribution during the 2021 year. Despite the significant currency headwind in the financial year 2021 and the ongoing disruption of COVID-nineteen, IPH has delivered a very strong result and once again it's a testament to the efforts for our people across the group. So moving on to Slide 3, table of contents. For today's presentation, I'll provide an overview of the operational highlights for the year. John will discuss the financial results in detail before handing back to me to provide some commentary on our key markets in terms of filing activity and a review of our operations.
I'll conclude with our comments about our strategic focus and how we're building a stronger platform for growth. As always, happy to answer your questions at the end. Slide 4 is a recap. We are starting to recap about IPH. As many of you know, IPH is a leading IP services group in the Asia Pacific region with number 1 patent market position in Australia, New Zealand and Singapore and number one trademark position in Australia and New Zealand.
We now operate 7 brands with over 900 employees working throughout our 8 IP jurisdictions in Asia Pacific, servicing more than 25 countries across the region. The new brand you can see on this slide is Applied Marks, which we acquired on 1 July this year. This is an exciting opportunity for us to build our online trademark and digital capability, which I'll talk about later in the presentation. Firstly, let me step through some of the highlights of the year. I'll speak to these at an operational level and then John will pick up on matters financial.
So moving on to Slide 6, we have delivered a solid result for the year. The performance demonstrates our success in acquiring and integrating IP companies into the group and the power of our network across the region. Despite the currency headwinds, including the 11% increase in the average Australian dollar against the U. S. Dollar in FY 2021 and ongoing market disruption caused by COVID-nineteen, underlying EBITDA was consistent with the prior year.
On a like for like basis, underlying EBITDA was up 10% with double digit growth in EBITDA margin, a very strong result. We continue to see an increase in client referrals from acquired businesses to IPH entities, with client referrals into IPH Asia up by 25% for the year. Our strong financial position and excellent cash flow generation has enabled a final dividend of $0.155 per share, 40% frank, bringing the full year dividend to $0.295 per share, up 3.5% on the prior year. As you know, China represents a key growth market for the Group, and I'm pleased to report continued significant patent filing growth in China for the year, with patent filings into our Beijing office increasing by 12%. A core part of our strategy has always been successfully acquiring and integrating companies to deliver margin accretion.
The acquisition of Synith IP is a good example of that and how we are adding value to the group. As you may recall, in the acquisition, Zenith comprised the businesses of Griffith Pack, Shelton IP, Watermark and Glasshouse Advisory. Post the divestment of Glasshouse Advisory and the integration of Watermark and the Grupo Pack, the former Genith business delivered an EBITDA margin of 28% for the year, which is up 39% from when we acquired the business. In my view, that's a strong endorsement of our acquisition strategy. So in summary, IPH has delivered another strong result.
We've also made significant progress in our strategy to strengthen the Group for future growth. Before handing over to John, I want to again acknowledge our people across the group for their dedication and hard work in assisting IPH to deliver this result. We've had the continuing impacts of COVID-nineteen, particularly in our Asian business throughout most of the year and again more recently in Australia, but we consistently ensured an uninterrupted level of service to our clients and that's a testament to our people across IPH. I'll now hand over to John DeStefers through the financial results in detail.
Thank you, Andrew, and good morning, everyone. Our financial highlights on Slide 8 reflect the group's performance in the COVID trading environment. The key factor to understand when reviewing these results is the foreign exchange impacts when compared to the comparative period. The average Australian U. S.
Dollar for the year averaged $0.747 versus $0.67 1 in the comparative period, an increase of 11%. We previously advised that a $0.01 weakening in the U. S. Dollar equates to $1,900,000 reduction in service charge revenue. Further, the strengthening of the Australian dollar versus the Singapore dollar of 8% year on year has had the impact of reducing the profits of our Singapore business when reported in Australian dollars.
Finally, the ForEx losses recorded in our P and L, those derived by banking receipts at a weaker rate than booked, are $400,000 greater than the prior corresponding period. Both sides of this slide reflect these FX headwinds. In addition, the left hand or statutory side reflects the increase in non cash amortization of intangibles, which results from our acquisitions. Unpacking the result, the main contributors outside of the foreign exchange movements have been an additional 1.5 months of acquisitive growth from the Zenith IP business, 2.5 months of acquisitive growth from the Walden's acquisition and margin expansion from both the Australian and New Zealand and Asian businesses. A particular feature of this has been the contribution from former Zenith IP Group, now comprising Griffith Hack and Shelton IP, of $29,400,000 This has been achieved by the previously announced initiatives of corporate cost reduction, sale of the Glasshouse Advisory Business and the integration of the Griffith Hack and Watermark business.
Those factors have assisted to deliver a group underlying EBITDA of $124,300,000 down 1% on prior year comparative as a result of the FX headwinds. I highlight, as Andrew did, the final dividend of $0.155 per share, which will be 40% franked, a 3% increase on the prior final year dividend. As the group has now utilized the franking credits obtained through the Zenith acquisition and received a tax refund in the current year, the franking level will likely revert to between 40% 60% on an ongoing basis. The DRP will operate for the final dividend. Moving on to Slide 9.
Being the like for like revenue and EBITDA and clearly the elimination of FX impacts produces a significantly more positive picture. A reminder that the like for like basis eliminates the impact of acquisitions and more importantly in this period, the adverse foreign exchange I discussed earlier. This new format slide draws out the highlights. However, for those who find this analysis useful, the full calculation is contained within the appendix to this pack. You may observe in that table approximately $17,000,000 in FX headwinds incurred this year when compared to the prior year.
Looking at the highlights, group wide revenue declined by 2%, however, EBITDA grew by 10% on a like for like basis. In ANZ, like for like revenue reduced by 3%, including as a result of the challenges of COVID-nineteen, as well as the integration of Griffith Hack and Watermark in Australia. However, this same integration was the largest contributor to the EBITDA growth and the margin expansion. While the ANZ calculation doesn't include the acquisitive impact of 8.5 months of Walden's IP, it does include incremental contribution generated under IP ownership over and above the results generated in that business under prior ownership. Asia has seen like for like revenue growth, the result of increased filings in China, Hong Kong and Singapore, some of these through the expansion of the network effect, the filings referred from other IPH offices.
These referred filings were also particularly beneficial to the EBITDA line. Excluding the impact of foreign exchange on the revaluation of the U. S. Dollar debt, the group's corporate costs were flat on a like for like basis, the elimination of annualized Zenith IP Group corporate costs of $1,100,000 being offset by investment in the IT function, increased D and O insurance costs and compensation for new executive positions added during FY 2020. Looking at Slide 10, the underlying NPAT and earnings per share.
This slide shows the calculation of the underlying result, which is on a consistent basis with prior periods and reconciles these to the reported statutory FY 2021 results. The main adjustments to the statutory results in the current period include acquisition costs related to completed and potential acquisitions restructuring costs related to post acquisition activities at the Zenith IP Group and Boardrooms the cost of equity based remuneration and a new item this year being expensing of 1 off costs associated with the implementation of a SaaS based general ledger and HRIS. This follows an interpretation issued by the accounting standard setting body during the financial year. The previous treatment would have been to capitalize these costs and then amortize. Amortization of acquired intangibles has increased the result of the Zenith IP Group and Boardman's acquisitions.
On an annualized basis, this non cash expense will be $21,800,000 The underlying effective tax rate is marginally lower at 25.6 percent reflecting the utilization of the tax losses. Moving on to Slide 11 and reviewing the cash flow statement. Cash flow conversion continued to be strong. The improved metric is reflective of the collection of a large receivable related to a legal matter as well as consistent underlying collections. Strong cash flows allowed the repayment of $32,700,000 of debt and borrowings in the first half, reducing leverage to 0.4x net debt to EBITDA at 30 June 2021.
It also continues to support a high dividend payout, which is reflected in the payout ratio of the year's total dividend, which is 90% of cash impact. Looking at the balance sheet on Slide 12. The main movements relate to movements in A and D valuations as a result of FX fluctuations and the acquisition of Portland's. As mentioned, strong cash flows allowed for the repayment of $32,700,000 in debt. In June, we extended our borrowing facilities to July 2024.
Slide 13 and the impact of foreign currency. Based upon the U. S. Dollar profile in FY 'twenty one, the $0.01 movement in the AUD USD exchange rate equates to approximately $1,900,000 of revenue on an annualized basis. As U.
S. Costs are minimal, the majority of this reduction falls to the EBITDA line. As mentioned previously, our FY 'twenty one results came through at an average of approximately $0.747 versus the comparative period of $0.671 The AUD also strengthened against the Singapore dollar, reducing the profits of the Asian business in Australian dollars. I will now hand back to Andrew to take a closer look at the business.
Thanks, John. Slide 14 onwards, I'll provide an update on filing activity for the year as a first pass. So Slide 15, Patent Market in Australia, an update on the applications as we see them in Australia in the last 12 months. As we always remind you, filing activities should not be assessed on a 6 month cycle. This is especially true, I mean, the continuing impact of COVID-nineteen, I might add.
It's also relevant during a period which included the integration of the Watermark and Riverbank businesses, which as we outlined in February, experienced some disruption from this process. Overall, total Australian patent filings increased by 15.5% compared to the prior year. However, this includes innovation patent filings, which are being phased out this month, I think it might be next week. The overwhelming proportion of these innovation filings were from China and Canada. They are up a combined 4 53% for the period.
As I've said in the past, innovation patents do not constitute a large part of IPH Group filings. Once the innovation filings are removed, total Australian patent filings increased by 2 point 6%. IPH has maintained a number one position with a combined group market share ex innovation filings of 36.2%. IPH's group filings declined by 4.8% for the year. This was an improvement from our update at the AGM where filings have declined by approximately 8% for the 4 month period to 31 October and the half year results which showed a decline of 5.7%.
However, when you exclude the impact of the decline in filings arising from the reset of the merged group of HAC business into a higher margin and more profitable business, IPH's filings increased by 0.7%. The decline in group of HAC filings can be attributed to some anticipated client losses as a result of the integration due to client conflict, some smaller filers by volume and the periodic filing patterns of some existing clients. This outcome is to be expected. Indeed, it was an anticipated result of the merger and our focus remains on ensuring Groofal Hack can build on a more efficient and profitable platform we've created to grow the business and enhance margins. Moving to Singapore.
The Singapore patent market decreased by 6.5% in the calendar year 2020 compared to the prior year. Calendar 2020 compares against a very strong Q4 of calendar 2019, which reflected changes to Singapore patent examination process closure of the foreign route from 1 January 2020. This resulted in a strong spike of applications in December 2019. However, preliminary data for the first half of calendar 'twenty one indicates that the market has increased by 7.7% compared to the first half calendar 'twenty. There is always a delay in obtaining final data in Singapore, which is why the first half calendar year is preliminary in nature.
For the same period, preliminary data rather shows IPH filings have increased by 16 point 8% on the prior corresponding period. That reflects excellent organic growth and has seen IPH materially strengthen our market leading position, a terrific result. IPH market share has significantly increased from 23% for calendar year 2020 to 25.9% for the first half calendar twenty twenty one despite the closure of the foreign route I mentioned earlier and of course the impact of COVID-nineteen. Moving to Slide 17, Asian patent market. As I mentioned earlier, one of the key highlights for you is how we continue to successfully leverage our network effect with an increase in client referrals from acquired companies to our Asian hubs.
Moreover, this not only includes domestic Australian and New Zealand client filings going into Asia. In FY 2021, I was very pleased to see that we were able to successfully leverage an international corporate client from 1 of the acquired business units in the Spirit and FERC's in Asia. We had continued momentum from half year for filings into China and Hong Kong. For the full year filing growth in China was up 12% and Hong Kong was up 10%. We are consistently growing our presence in China with a compound annual growth rate of over 10% of filings over the past 3 years.
Filing activity across Asia for FY 2021 compares to a very strong prior year. As you may recall, we had one client who filed a significant number of patent applications in 2019 2020 and removing the effect of the significant increase, we experienced patent filing growth of 8.4% across our Asian jurisdiction in FY 2021, excluding Singapore, which of course I just mentioned grew almost 17%, with growth across all key jurisdictions with the exception of Vietnam. Filings declined by 5% when you include that client's filings as mentioned previously. IPH continues to be attractive to large clients. In FY 2021, we have seen multiple large clients increasing filings across a number of jurisdictions across our network.
Moving to Slide 18, trademark market. In Australia, we have maintained our number one position in this market with an increase in group trademark filings for the year. The overall trademark market in Australia increased by about 18% for the year. Excluding self filers, trademark filings increased by 24.2% in FY 2021, much of this growth mainly arose from Australian applicants. We are well placed to leverage this trend with the acquisition of Applied Marks, the 4th largest of the top 50 trademark filing agents with a client base, which is predominantly in this growing Australian retailer segment.
While the market has experienced growth mainly from Australian applicant filings, the IPH portfolio is traditionally more internationally weighted. And pre the acquisition of Applied Marks, Australian filings made up only around 30% of IPH total filings compared to the market, where around 70% of applications are from Australia. Pleasingly and even with this background in mind, IPH trademark filings in Australia excluding implied marks increased by 7.7% in FY 2021 and we continue to be the leading Australian trademark group by market share of the top 50 agents. The increase in trademark filings generally reflects an economic recovery story in terms of the improving economy and business creation and expansion. For example, IPH experienced strong growth from U.
S. Applicants. They were up 17.4% for the year. Moving to Slide 19 and 20, strategy. I'll spend the next few slides just stepping through our strategic progress.
As we've outlined before, our strategy has 3 main components organic growth, consolidation of acquisitions and growth step outs. I'll address each of these in turn. Firstly, organic growth on Slide 21. We have mentioned for a number of years now that IPH maintains a core competitive advantage of an unrivaled network across Asia Pacific region. However, this network effect is more than simply referring clients, it's about leveraging the combined power of our member firms and finding smart and more efficient ways to operate and to build greater capability and enhance our performance.
During FY 2021, we have demonstrated a success of this approach. As I mentioned earlier, we have significantly strengthened our number one patent filing position in Singapore and grew market share to 25%, while findings in Hong Kong up 10%, China up 12%. We continue to see an increase in client referrals from acquired businesses to IPH synergies with client referrals in our Asian hubs up by 25%. Most pleasingly was that cross brand referral of an international corporate into Spruce and Ferguson Asia. As I mentioned earlier, on a like for like basis removing the impact of those significant filings from one client in FY 2020, IPH filings in Asia in 2021 were up 8% across key jurisdictions with the exception of Vietnam.
Now 22 consolidating acquisitions, IPH has a consistent track record of acquiring and integrating businesses to deliver growth and margin accretion. It has been the hallmark of our success and it remains a fundamental part of our strategy. On this slide, we review an example of this process, Griffithec. Having acquired Griffithec for Watermark as part of the Zenith IP acquisition in August 2019, we made a decision in November 2019 to integrate the 2 businesses to create 1 firm operator in the Griffipak brand from July 2020. And notwithstanding the difficulties arising from merging these businesses during the COVID-nineteen pandemic, including a prolonged Melbourne lockdown, we have successfully completed the integration and delivered $2,000,000 in synergies from the combined end in FY 2021, which was in line with our previous guidance.
That has assisted in bolstering the overall EBITDA margin of the former CNF's IP business. Our acquisition, Cinnabar's operating EBITDA margin around 20% compared to 28% for FY20 1, an increase of 39% once you adjust for the AASB 16 lease accounting provisions and post divestment of Glasshouse Advisory Integration of Watermo. Clearly, we are strengthening the Griffa Hack business. We have appointed a new leadership team including a new Managing Director, Head of Growth and Head of Operations. We have also made a number of new hires toward the end of FY 2021 at all levels of the organization to support growth in FY22 and beyond.
Obviously, when you undertake the integration of 2 firms, there are some expected disruptions in the combined business. I've already mentioned the impact on filings from the loss of some smaller Watermark clients and also a small number of client losses due to other group conflicts. However, we are very pleased with the improved financial performance of the business and its increased referrals to our Asian network in FY 2021, which of course assist the earnings of our Asian business. Within the new brand, new team and refocused business, we are very excited about the growth prospects ahead for Griffith Hack. 23, another step out slide.
Our A. J. Park business completed the acquisition of Baldwin's IP in New Zealand in October 'twenty. The successful integration of Baldwin's into A. J.
Park provides A. J. Park greater depth of expertise, enhance career opportunities for our people and provides clients with access to a complementary team of experienced IP professionals in other jurisdictions. We have completed the full physical and systems integration, which is led to synergies being kept in areas of rental savings and rightsizing of the business. The earnings contribution from Baldwins in the 8.5 month period since acquisition is consistent with the previous guidance of around AUD 2,000,000 The Merge business is the leading patent and trademark business in New Zealand.
We have a rejuvenated brand identity for Aiche Park, which represents an opportunity to capitalize on the key attributes of this wonderful business. It's already a top referrer of work into YPH Asia and I think there's more opportunity to come there. The next one, Slide 24, Applied Marks, we like this story. It's another example of how we're implementing our growth step out strategy. We acquired Applied Marks on 1 July.
It's a leading Australian online automated trademark application platform and provides automated registration and intelligence services to companies and domain names. They have grown to be the 4th largest filer of Australian trademarks rather with the focus of what I call the retail market. And they've been able to do this with a very light people model, leveraging their strong digital capability and expertise. This is a very good acquisition for us. It accelerates our digital capability while allowing us to address the growing retail trademark market.
It also bolsters our ability to participate in the online automated IP services space. It will support us in evolving our traditional trademark offering in line with the changing market. The resources and technology that we acquired through Applied Marks will contribute to a new digital services function within the IPH Group, and we are pleased that the principles from Applied Marks will be part of that function to drive our digital capability. Over time, we expect to harness this digital expertise beyond trademarks and into patents and related areas of IP. We can see a changing landscape in IP, and we are investing ahead of the curve to ensure IPH is the forefront of this change.
Slide 25, our people. We continue to focus on attracting, motivating, developing and retaining our people across the group. We are investing in our people to ensure that we have the right talent, continue to deliver great outcomes for our clients. Our key focus during the year was building a group wide people function, which is now operational across Asia Pacific. That includes building a platform, embedding new centralized tools and processes across the group, including a new HR information system.
We've introduced new policies to support our people, particularly during the pandemic, including hybrid working. We also enhanced paid parental leave. Another core focus of our strategy is providing opportunities for continued career advancement. FY 2021 was a record year for promotions with the IPH Group with 35 promotions across member firms, including 11 principal appointments. The breadth and depth of promotions highlights the opportunity in collective strength of talent across our group.
Indeed, we have made more than 50 principal appointments since 2014. While we have 180 senior practitioners at IPH, we continue to invest in the future of the IP profession with more than 95 early career attorneys across the group. We've also appointed a new commercial Chief Commercial Officer for IPH in July 21 and during the year new Managing Directors were appointed in Spruce and Burgess in Australia, Griffipak and H. A. Park and a General Manager in Piercy's.
Our ongoing commitment to operating as a sustainable company is reflected in Slide 26. It's an important aspect of our strategy. We recognize that our people are fundamental to our success and I've outlined the progress we have made in this year in the previous slide. We have already exceeded our gender diversity target for female participation at the senior executive principal level. We maintain a robust governance and risk management system, which now includes a new supplier code of conduct as part of our ethical and socially responsible procurement, following on from the release of our first modern slavery statement earlier this year.
We are very pleased this morning also to have released our 3rd annual sustainability report as part of our suite of reports for the FY 2021 period, which addresses our commitment to act in a sustainable manner and key areas affecting our business. Now the nature of our business is such that we have not identified a material exposure to climate change change risks. However, we are mindful of potential risks that may develop for our business and we'll continue to assess our exposure to climate change and environmental related risks. As the leading IP group in the region, we are conscious of being at the forefront in delivering end of the client solutions and promoting the industry. And IPH and our individual member firms and attorneys therein continue to be recognized as leaders in this profession.
Final slide, let me conclude with some final comments about our progress and our outlook. In FY 2021, we have once again demonstrated our ability to achieve business improvement from acquisitions and the rightsizing of our acquired businesses has created a more efficient operating model to deliver margin accretion. We remain very focused on organic growth while leveraging our network for increased client referrals and targeting new business opportunities. In FY 2022, we will harness the acquisition of Applied Markets to further develop our technology enabled IP services and continued disciplined investment in the WiseTime and associated billing platform, Ledgi Bill. We maintain a solid financial position with low gearing and consistent cash generation, which enables to continue to assess further growth options, including potential international acquisition of opportunities in core secondary IP markets and IP adjacencies.
I'm very pleased with our result and our progress this year. Finally, and whilst I'm not in the business of predicting foreign exchange movements, I do note that today's U. S. Dollar spot rate is lower than last year's average and with reference to John's currency slide, we may enjoy an FX tailwind as we move into FY 'twenty two. In closing, I'd like to acknowledge the hard work and contribution of all our people and many thanks to all of you for your continued interest and support.
And over to our moderator, where John and I are happy to take some questions.
Thank you. We will now begin the Q and A session. And the first question will come from Michael Peat with Goldman Sachs. Please go ahead.
Good morning, Andrew and John. Congratulations on the result in a tough environment.
Good morning, Michael. Thanks very much.
Yes. First question for me. Just on those 22 priorities, it seems the order is pretty clear organic growth ahead of acquisitions. I guess that's in the current environment that sounds logical. Could you just step us through maybe on the organic growth, what you're targeting in terms of maybe any chance for margin expansion, whether it's through cost out, automation efficiencies or is it new client wins and just getting that scale on the business that might drive margin?
Just looking for a margin direction sort of guide if we can.
Sure. Thanks, Michael. I'm not sure I'd say we're necessarily focused on organic growth above and beyond equisitory growth, but we certainly the acquisitions remain firmly on the agenda. They're not as easy to execute in this environment as you'd appreciate, but certainly given what we have in our balance sheet and what I've said in the past that is something we continue to focus on. In the context of organic growth, look, what's underpinned our organic growth opportunity has always been over the last 20 years or less, this network effect and it continues to drive opportunity in the firm, the group rather.
That's one of the reasons why Singapore went to 25 percent market share was that ability to refer across business unit domestically, the domestic clients of AJ Park, Group of HACC and Spirits and the Ferguson Australia going into Asia. What I did mention in the result was for the first time we were able to leverage a corporate client from a non Sprues and business into Sprues and the Ferguson Asian and that's a major development. So, if we can continue to take that opportunity across brand, that's one of the reasons why we rebranded IPH and we're starting to reflect IPH more to the market than we've done in the past, I guess, as a bridge to assist that kind of leverage. But that's a huge opportunity for us to take the corporate client relationships, the international corporate client relationships of Griffith Park and AJ Park, Shelston's and put them into the Spreesens Asia Group. And that will drive growth in the short term.
And it's what it's just a further development of what we've seen in the last few years and what we've experienced in Asia for the last 20 years for the Sprues.
All right. Thanks for that, Andrew.
And the next question comes from Sam Haddad with Bell Potter Securities. Please go ahead.
Hi, Andrew and John, and well done on the strong result. Just more on the recent half year and as we go into FY 'twenty two in terms of filing trends, what are you seeing month on month? I know we don't like to focus on short term, just look at the directional trend that you're seeing from both a market and from your company specific perspective, because from what I've seen in sheet data is that it seems to be strengthening in April May. I'm just not sure how it's been since then.
I think you're right there, Sam, in terms of the Australian picture and really the highlight or the surprise of the Australian picture has been the strength in trademarks and we've seen that and we've brought the market and we've benefited from that ourselves. I think you're right in terms of patents that April, May did look pretty good. June July are probably a little bit early to make the call on those. Probably for us, our focus, and you can see in the presentation, has been on the strength of our Asian filings. So particularly in Singapore in the 6 months, and that's continued on recently, and also there's China and Hong Kong filings.
Just a quick is there a
correlation with the reopening of Northern Hemisphere markets through that trend? Or is it a delayed effect?
Well, I think certainly in trade, this is Andrew speaking. Sam, certainly in trade marks it goes on and off very quickly. And as I say that recovery piece in the traditional IPH market share, which is international based, and we saw that 17%, I think it was growth in U. S. Applicant trademark buying.
So that is an economy recovery story very much so. There's more of a lag position on terms of R and D converting into patents, which is a longer term view. What will happen, of course, with more certainty around economic conditions is the existing pipeline of patent applications, which they may clients may have restricted the scope of filings internationally to the more defined markets. In a recovery piece, they'll extend those filings into more countries. And that's where we get a sweet spot.
So, yes, more definitive in trademarks and probably a little bit less so in patents.
Okay. Thank you. The next question comes from Conor O'Pray with Canaccord Genuity. Please go ahead.
Good morning, gentlemen. Just maybe following off on the first question around organic growth. It looks as if there I said revenue sort of stabilized, bottomed down a little bit in the second half. Is it reasonable to expect and is it reasonable to expect sort of or turn to some organic growth this year, FY 'twenty two, given you're sort of lapping a couple of sort of softish comps from sort of second half 'twenty, first half 'twenty one?
I think that's our expectation, Sam, particularly sorry, Connor. That's our expectation, Connor. Looking forward more particularly with our international client base, the world seems to be moving on probably quicker than Australia. So we're well equipped to service those international clients. So we're probably looking to revert back to our traditional growth rates in Australia and Indonesia.
Just if I can add to that Conor, we have to right size these businesses in the acquired space. And we've got the margins more where we like them to be, where we're comfortable with them being in these acquired businesses. They're good businesses. They're excellent businesses. And they're now right sized.
They're ready to go. And it's time to drive some top line growth for those businesses.
That's good. I'll jump back into the queue.
The next question is a follow-up from Michael Peete with Goldman Sachs. Please go ahead.
Yes, thanks very much. I just wondered maybe this one for John on just to remind us if you could on annualizations that are coming through and that's on both positive and negative I guess just thinking about acquisitions that are still going to annualize is that ball and still coming through? Just on the client loss side as well with Zenith, is that all washed through now or is there still some potential sort of volumerevenue loss to come through in that legacy business? And just on the cost out side as well, are there any annualizations still coming through from the previous cost outs announced?
3 at once, Mark. I think you've reached in the protocols there. So in terms of the acquisitive portion for FY 'twenty two, so we will have an additional 3.5 months worth of ball bins. That's the only components of that. In terms of, I think the next one was the Zenith client losses.
I think given that Growth Hack and Watermark merged 1st July last year, we would hope to that, that has bottomed out. And as Andrew mentioned earlier, that's we've kind of right sized that business and we are looking for growth from that business coming to FY 'twenty two. In terms of the cost out, I think someone referred to it in an earlier question, probably FY 2021 did have the benefit of putting Griffith Hack and Watermark together and we also had the Baldwins acquisition there. So there were cost out opportunities there. So looking forward to FY 2022, the cost out opportunities are probably more businesses as usual.
So in our budgeting process, we always look to grow EBITDA greater than revenue. So EBITDA margin will grow, but perhaps those big ticket items were in last year rather than the year coming.
All right. Thanks for that, John.
The next question is also a follow-up, and it's from Sam Hanan with Bell Potter Securities. Please go ahead.
Thank you. Just a question on funding capacity. You've got a conservative balance sheet. Where do you feel comfortable limiting the balance sheet to just to get an idea of capacity to acquire businesses?
Yes. Certainly, Sam, we are conservatively geared presently at 0.4x. We've renewed our debt funding or debt facility through July 24. I think we've said previously that we would be happy due our great cash flow capacity and ability to pay around 1.5 times might be a comfortable level for us, maybe 2x, a little bit in excess of 2x in an acquisition scenario. But with that ability to generate cash and payback, bringing it back to that kind of 1.5 level pretty quickly.
That's about $140,000,000 of funding capacity roughly?
That sounds right, yes.
Thank you.
The next question is from Joshua Haynes with West Investments. Please go ahead.
Good day, guys. Well done
on the results.
Just I guess pulling together a couple of the previous questions. In terms of having clean air post COVID, post some of the integration, I guess market share
losses and the like,
What sort of normalized growth rates should we expect in Australia and Asia? Previously, you've talked to sort of CPI in Australia and maybe mid to high single digit top line in Asia. Is that still the expectation?
Yes, Josh, I think that's what we're still looking for in the Australia and New Zealand markets, those mature markets, revenue growth, let's say, 2% or 3% and then EBITDA growth, as I mentioned earlier, we always budget for more EBITDA growth at 3% or 4% in Asia. That's kind of 6% to 8% in terms of revenue growth and maybe 7% to 9% in terms of EBITDA growth. But as you say, hopefully this year, we are coming off a little bit of an easier comparative. So hopefully, those will make it a little bit easier to achieve. And remembering that the Asian business, pre COVID, was doing some double digit numbers for 3 or 4 halves a row.
So that's what we're hoping, but always a little bit cautious in terms of our predictions.
Yes. And obviously, those numbers pre FX, which as you said, as it stands, well, certainly isn't looking a headwind at this point in the year?
That's correct, yes.
Okay, great. Thanks for that. Well
done. The next question is another follow-up from Michael Peete with Goldman Sachs. Please go ahead.
Hi, it's just another one. Just on Singapore, just wondering what drove that market share increase. Is it if you could split that between existing client activity and maybe new wins, that would be useful. Thanks.
We haven't really split it out, Michael. But look, what we've seen is some great support from the acquired businesses coming into Singapore. And that's a wonderful part of that network effect from the domestic clients going in. And as I say, we had 1 international corporate which underpinned that. It also was part of the China growth story as well.
Plus, we've had some existing clients in that region that continue to see Singapore as an opportunity and increase their filings. They haven't increased their filings necessarily in all aspects of Asia, but they continue to increase their filings in Singapore. So it's a combination of existing clients focusing in a little bit, but not filing as much in the Vietnam and Indonesia and Thailand, but certainly filing into Singapore and the referred cases coming from the acquired businesses plus that corporate opportunity crossing a brand, which is what I really like. And if we get more of those, Singapore will look after itself.
Thank you. Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the call back over to Doctor. Blattman for closing remarks.
Many thanks everyone. I know it's a new world. We were thrilled with this last year. We're doing this virtual stuff, but here we are again. Let's hope that the annual in 'twenty two, we're doing some recent one on ones and group presentations in person.
But look, thanks for your support throughout the year. I know it's a difficult time for us. I'm pleased to see our business in Singapore starting to open up and people are getting around. Let's hope we're not too far behind. Thanks very
And thank you, sir. That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.